Date of publication: Oct 26, 2013
Section heading: Main Section
Page number: 024
Byline / Author: By Anita Md. Shariff
THE 2014 Budget saw several measures, perceived as being unpopular, to be put in place. Implementation of the Goods and Services Tax (GST), reduction in subsidies, and BR1M have received much attention.
The time when we were showered with generous benefits from the government, including huge subsidies, various forms of BR1Ms and salary increases (for government servants), is almost over.
People must understand that such good things must eventually come to an end. The incentives had cost the government billions of ringgit.
While most recipients rejoice and welcome the incentives, none had ever come forward to remind that all the favours are repayable in future in the form of taxes. The saying "no such thing as free lunch" best describes this situation.
All extended favours are made up of government spending, while taxes constituted its revenue. When spending exceeds revenue, the nation will experience budget deficit. It also means a rapid increase in national debt.
Latest data indicates that Malaysia's national debt has almost reached 55 per cent of its GDP. It is quite a big jump from 2008.
The level is quite worrying. If the situation prolongs and remains unchecked in the coming years, we could be in much trouble.
Our currency will be weakened, resources will drain out, cost of borrowing will increase, inflation will rise and the economy will plunge.
Isn't now the right time to quickly pay back what we have spent on?
Large debts with compounding interest require large revenues to service.
The GST, a form of broad-based tax that will affect the majority, is expected to generate billions in tax revenue to the government. Except the essential ones, most goods and services will see an increase in their final price.
Although it is undesirable as it means higher cost of living and lower disposable income for the people, an increase in tax through the GST is vital to avoid disaster.
The government must ensure that tax revenue collected be channelled to the right place. The prime minister's assurance to control waste and mismanagement is much lauded.
The opposition leader suggested that GST be put on hold until the minimum household wage reaches a certain level, but prolonging it will drag the nation into a worsening situation.
A plan to organise a nationwide protest after opposing the tabling of the budget in Parliament won't help the situation either.
When the nation is in trouble and the people suffer, we know no one else will be made accountable but the government; for sure it will be not be the opposition.
Anita Md. Shariff,
UiTM Dungun, Terengganu